Published: Wednesday, March 3, 2010
GUEST COMMENTARY / ADDRESSING UNEMPLOYMENT
Legislature must act because Washington needs jobs
Our state has a jobs crisis. Our unemployment rate is 9.5 percent, the highest in a quarter century, and we’ve lost one of every 20 jobs since the beginning of the recession. The construction industry alone has lost 52,000 jobs and is experiencing an unemployment rate of 50 percent in Eastern Washington alone. Unless our elected leaders act, Washington faces continued high unemployment for years to come.
Unemployment on this scale creates huge economic and social problems as many people can’t meet even their most basic needs. Our state can’t wait for projected economic recovery sometime in the future. Action is needed now to stimulate the economy and put Washington familes back to work.
The good news is that legislation has been proposed in Olympia to spur economic development and create jobs. The challenge is to make certain this legislation does not get bogged down by politics and process.
SB 6789 and HB 3147 would attract major investment and jobs to the state by providing a 15-month sales-tax exemption on the purchase and installation of computers and energy equipment for new data centers in rural counties. The legislation has strong support from labor and business because it is a jobs bill that will not cost the state money. If the data centers are built, we gain much needed jobs and local tax revenue. Without the exemption. the projects go elsewhere.
Data centers house large banks of computer servers that are hooked up to the Internet to provide cloud computing and search, e-mail and other online services. They are vital infrastructure to support the new technology economy. Our state’s leadership in information technology, fiberoptics, inexpensive hydropower, available land and mild climate should give Washington a clear advantage to attract data center projects.
For a few years that was the case, and Washington enjoyed the benefits of job creation and increased revenues. According to a Washington Research Council study, data centers have contributed more than $1 billion to the economies of Douglas, Grant and Chelan counties in Eastern Washington. Annually these counties will gain more than $25 million in new earnings from data centers, along with increases in property taxes to fund essential services while lowering the tax burden on existing property owners.
But this economic engine ground to a halt in 2007, after the state attorney general determined that data center facilities don’t qualify for a rural sales tax exemption on plant and equipment.
That ruling took away the state’s competitive advantage and put a brake on economic development and job growth. Since then Microsoft and Yahoo shifted planned data center projects from Washington to states like Oregon, Texas and Illinois. Google, Amazon, Facebook, Disney, Apple and other world-class companies have also given serious consideration to locating here but instead are building elsewhere.
We lose these projects because the sales tax on computing equipment creates a barrier to economic investment. In a conservative estimate, Washington missed out on more than 1,000 data center construction jobs just in the past year.
Major data center projects are poised to locate in Washington if this legislation is approved. We must not allow these projects — and jobs — to go elsewhere. We can’t afford to push away thousands of family-wage construction jobs, hundreds of permanent high-wage direct jobs and other indirect employment.
Approving a sales tax credit for data center computer equipment will allow us to keep and attract technology company investments and help grow our core technology industry.
By passing these bills, elected officials can create a jobs stimulus immediately that doesn’t cost money, while also enhancing our technology sector for even greater economic benefit in the future. Elected officials should approve this legislation because Washington needs jobs now.
Thomas Fairbanks is CEO of Seattle-based VECA Electric & Communications, one of the region’s largest electrical contracting firms. Travis Patterson is the business representative for the International Brotherhood of Electrical Workers (IBEW) Local 191, based in Everett.
Unemployment on this scale creates huge economic and social problems as many people can’t meet even their most basic needs. Our state can’t wait for projected economic recovery sometime in the future. Action is needed now to stimulate the economy and put Washington familes back to work.
The good news is that legislation has been proposed in Olympia to spur economic development and create jobs. The challenge is to make certain this legislation does not get bogged down by politics and process.
SB 6789 and HB 3147 would attract major investment and jobs to the state by providing a 15-month sales-tax exemption on the purchase and installation of computers and energy equipment for new data centers in rural counties. The legislation has strong support from labor and business because it is a jobs bill that will not cost the state money. If the data centers are built, we gain much needed jobs and local tax revenue. Without the exemption. the projects go elsewhere.
Data centers house large banks of computer servers that are hooked up to the Internet to provide cloud computing and search, e-mail and other online services. They are vital infrastructure to support the new technology economy. Our state’s leadership in information technology, fiberoptics, inexpensive hydropower, available land and mild climate should give Washington a clear advantage to attract data center projects.
For a few years that was the case, and Washington enjoyed the benefits of job creation and increased revenues. According to a Washington Research Council study, data centers have contributed more than $1 billion to the economies of Douglas, Grant and Chelan counties in Eastern Washington. Annually these counties will gain more than $25 million in new earnings from data centers, along with increases in property taxes to fund essential services while lowering the tax burden on existing property owners.
But this economic engine ground to a halt in 2007, after the state attorney general determined that data center facilities don’t qualify for a rural sales tax exemption on plant and equipment.
That ruling took away the state’s competitive advantage and put a brake on economic development and job growth. Since then Microsoft and Yahoo shifted planned data center projects from Washington to states like Oregon, Texas and Illinois. Google, Amazon, Facebook, Disney, Apple and other world-class companies have also given serious consideration to locating here but instead are building elsewhere.
We lose these projects because the sales tax on computing equipment creates a barrier to economic investment. In a conservative estimate, Washington missed out on more than 1,000 data center construction jobs just in the past year.
Major data center projects are poised to locate in Washington if this legislation is approved. We must not allow these projects — and jobs — to go elsewhere. We can’t afford to push away thousands of family-wage construction jobs, hundreds of permanent high-wage direct jobs and other indirect employment.
Approving a sales tax credit for data center computer equipment will allow us to keep and attract technology company investments and help grow our core technology industry.
By passing these bills, elected officials can create a jobs stimulus immediately that doesn’t cost money, while also enhancing our technology sector for even greater economic benefit in the future. Elected officials should approve this legislation because Washington needs jobs now.
Thomas Fairbanks is CEO of Seattle-based VECA Electric & Communications, one of the region’s largest electrical contracting firms. Travis Patterson is the business representative for the International Brotherhood of Electrical Workers (IBEW) Local 191, based in Everett.
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